US Sanctions on Russia Ripple Through Tanker Market

By Alex Longley and Jack Wittels (Bloomberg) —

Oil tanker rates jumped on Monday as the Biden Administration’s sanctions on Russia’s petroleum trade threaten to cut the supply of ships while forcing traders to seek alternative sources of crude.

On Friday, ten days before Donald Trump takes over, the outgoing president sanctioned about 160 Russian oil tankers. It means about a tenth of the current crude-carrying fleet is under US measures. Benchmark tanker rates jumped 39%, the most since August, tracing a rally in shares of the world’s largest pureplay owners of the ships. 

The hike is just one example of how the sanctions — the most aggressive by any western power since the war in Ukraine began — are threatening to disrupt Russia’s petroleum supply chain. The vast majority of tankers sanctioned by the US in previous rounds haven’t loaded any cargoes since then, and the sweeping scale of the latest move has driven a more than $4 a barrel increase in Brent crude futures.

Even before Friday’s sanctions, refiners in India and China had been hurriedly seeking barrels of Middle E…